“Ministers decided that in light of the ‘Panama Papers’ being released last week, it’s worth looking at whether the disclosure rules are fit for purpose and whether there are practical improvements we can make,” Mr English says.

“Our rules require foreign trusts to be registered and to keep detailed financial and other records, which can be requested by Inland Revenue and passed on to tax authorities in other countries.

“In addition, we have a strong tax treaty network with the express purpose of discovering and preventing tax avoidance.

“As we’ve said, we’re open to considering changes to disclosure rules if that is warranted. So we’ve asked Mr Shewan to take a thorough and independent look at the current regime to check that it’s fit for purpose,” Mr English says.

The terms of reference include reviewing foreign trusts’ disclosure rules as they apply to record keeping, enforcement and the exchange of information with other tax jurisdictions.

Mr Shewan has been asked to report back to the ministers by 30 June.

Mr Woodhouse says it’s important to keep the foreign trusts issue in context.

“Claims that New Zealand is a tax haven are wrong. We have a robust tax base and we’re operating under stronger disclosure rules introduced by the previous Labour government in 2006.

“As Michael Cullen said at the time, he sought to develop a policy that worked for all concerned - enabling New Zealand to cooperate with other tax jurisdictions, while not disrupting the legitimate financial transactions of foreign trusts.

“Just three years ago the OECD rated New Zealand as “compliant” in this area - the highest possible rating. It’s due to look at our tax transparency rules again next year.

“In the meantime, the OECD has called a specially-convened meeting in Paris this week to consider issues raised by the ‘Panama Papers’ and our Inland Revenue is sending a representative to that meeting.

“We will certainly consider any issues raised there and we’re prepared to look at changing the disclosure rules if Mr Shewan’s review finds this is warranted,” Mr Woodhouse says.